Interval hits owners with new upgrade fees

Members of Interval International got a rude surprise recently, when they discovered a new fee has been added to many timeshare exchanges. Depending on what you’re trading, this could add $100, $200, or even $300+ to the cost of your transaction. Ouch! 🙁

On the other hand, many owners won’t see any effect. It all depends on your exchange strategies.

Aside from the fee itself, the fact that Interval put it in place with no warning and no announcement angered owners, too. Reactions in the community varied from disappointment to outrage, with some owners saying they’ll vote with their feet, and seek other exchange channels.

So what’s the big deal?

A new fee from Interval could mean busier credit cards

Upgrade fees – How this works

If you exchange your timeshare week for a larger unit, you now need to pay an upgrade fee, on top of your normal exchange fee.

Who does this hurt?

If you exchange your timeshare week through Interval into a larger unit, this will affect you.

The primary people that are adversely affected by this are owners of high-quality, high-value smaller units (studios and 1-bedrooms), who are used to trading their weeks for larger, lower-value or off-season timeshares.

If you own an upscale studio in Hawaii, you paid for this through a higher purchase price and higher maintenance fees every year. The principles of trading power and comparable value exchanges made that worth a 2-bedroom in Branson off-season.

Now Interval is saying that you’d have to pay an additional $198 to get that Branson week, on top of the higher cost you’re already paying for that Hawaii week.

Size matters with II – now more than ever

Unhappiness in the owner community

Members of the Interval community have been active in expressing their displeasure at this change. A few of the common themes are:

So a trade I looked at yesterday suddenly costs more today, with no warning? If you at least told me what was coming, I could have made plans accordingly.

Another fee for something that used to be free!

Now to trade my high-value 1-BR into a lower-value 3-BR, I’ll have to pay $198 more. I guess now it doesn’t matter how highly your resort is rated.

If you’re charging a fee to trade up in unit size, then there should also be a credit for somebody who’s trading down in unit size.

It seems like it’s not fair that owners of small, high-demand, high-season weeks have to pay for an upgrade in unit size, while they’re accepting a downgrade in all the other factors (location, resort quality, season).

Interval’s response

Interval did post a response in the community forum. Here’s what they wrote:

Hello Interval members,

We have heard your concerns and apologize for not providing advance notice about the new unit-size upgrade fee. We assure you that we will improve our communications in the future.

Prior to launching this fee, we reviewed data and conducted member research to better understand member behavior and inventory utilization. We learned that members often confirm larger units than are necessary to accommodate their travel party. This finding, along with the fact that points-based members already relinquish more points when receiving a larger unit, the trend toward shorter booking windows, and other factors, influenced the introduction of the unit-size upgrade fee. As always, if a unit-size upgrade is offered during Flexchange, there is no additional fee.

The unit-size upgrade fee supports Interval’s commitment to providing comparable exchanges to members around the world. Our inventory control and optimization processes are designed to create the greatest number of exchange opportunities possible for members, while maintaining fairness across the system.

Here’s how I see it…

The first point on their FAQ page says “The goal of our ‘comparable exchange’ concept is to parallel the supply of and demand for both the week that you relinquish and the week that you request in exchange.”Adding a fee undermines this concept – in effect, it’s saying that one factor (size) takes precedence over the combined supply and demand factors (ie. trading power).

Interval is taking a page from the small exchange companies, who have traditionally charged unit size upgrade fees. With those companies, it’s a simple a “week-for-week” exchange, plus an upgrade fee. II and RCI have used a more powerful approach based on trading power calculations.This seems like a step backwards to me, in terms of system sophistication.

They mention as one of their reasons that “points-based members already relinquish more points when receiving a larger unit“. True, but they also relinquish fewer points when booking a smaller unit. This upgrade fee is one-way only – they take more for upgrades, but don’t take less for downgrades.

While we’re talking about points, let’s notice that points charts take other factors into account besides unit size. Interval’s own II points grid makes it abundantly clear that they value some 1-BRs as much as other 2-BRs:
– A 1-BR with TDI 135-150 gets up to 99,000 II points
– A 2-BR with TDI 90-110 gets a maximum of 77,000 II points.

How is it fair that the owner of the high-value 1BR week has to pay a fee to “upgrade” into that lower-value 2BR?

To me, it looks like it’s just a way to boost their revenues, like the airlines have been doing with all their fees for this, that, and the other. Unfortunately, unlike no-frills airlines, we aren’t seeing lower base prices to go with these add-on fees.

This could also be intended to boost their Gold and Platinum membership levels, since these members get a discount on the new fee.

If you’re thinking of upgrading your II membership just to get this lower fee, remember they can change the benefits of the membership levels at any time. You’d hate to pay for 5-year Platinum, only to see this discount disappear next year.

How this compares to RCI

Personally I prefer RCI’s transparent system, where every deposit and exchange has a number of Trading Power Units assigned. In Interval, trading power has always been invisible, which makes it a guessing game.

Right now, a quick search on RCI shows a Hawaii Studio week worth 32 TPUs, and an off-season Myrtle Beach 2-BR week worth 6 TPUs. IMHO, RCI is properly recognizing the value of the high-demand Hawaii property, and the low demand for Myrtle Beach in the winter.

If you want to do off-season travel, with RCI, you could get 5 of those 2-BR weeks for the TPUs you get from your Hawaii studio. RCI has a higher exchange fee, but no upgrade fee, so each of those 5 weeks would cost you $219.

On the other hand, if you were doing the same trade right now on II, you’d get just 1 off-season week and pay $377 for the exchange (upgrade + exchange fees). That’s on top of giving up your high-value Hawaii week. This makes no sense!

Owners of small units may want to re-examine their trading strategies

What effects could this have down the line?

This is conjecture on my part, but here’s what I can see happening as a result of this move…

Fewer high quality studio and 1-BR deposits. Owners with high-value smaller units may find that they get a better deal by trading those through another company like RCI or SFX. That means if you’re on II looking for a studio in Maui, these may get harder to find in the future, as a result of these owners taking their deposits elsewhere.

Some people may switch to renting. What if you can’t move to RCI? If you’ve got the high-value unit, you may find more value from renting it out. With rentals, the market prices them based on demand for different resorts, seasons and unit sizes. If you’ve got something in demand, then you may be able to get more for it this way.

Less demand for trades into larger, low-value units. Let’s say last year, you could trade your primo ski week 1-BR for a 3-BR in Orlando, but now it’s going to cost $198 more to do that. Would you still do that? Some people will not, which means the demand for those lower-value larger units could decline. Theoretically, lower demand could mean their trading power declines, too.

Expanding what a studio/1BR can see? Some II users are reporting that they can now see additional exchange options when searching with a studio. (I don’t have an accurate baseline search for comparison, myself.) If II wants to boost the demand back for those larger, off-season units, they might make them visible to more small unit exchangers, who previously didn’t have enough trading power to see them. As an extra bonus for II, if they can encourage more upgrades by opening these up to more people, they get more upgrade fees, too.

Low-priced large units better for trading. Let’s say you could purchase the high-priced Maui beachfront studio, or the cheap 2-bedroom in Branson. If you could use either of these to exchange through Interval into a 2-BR in Tahoe, it would cost you an extra $198 with the studio, so the cheap 2BR has an advantage as a trader.

It’s obvious that II can change the rules at any time, so buying something specifically to fit their trading system is a risky proposition.

Fewer people doing ePlus retrades. Before, you could take the smaller unit, and then wait to see if you get a better deal on retrade. Now, that better deal would cost you the ePlus fee + upgrade fee. Is it still a better deal? Some people will likely decide that it’s not.

Flexchange more important than ever. You can still get size uptrades without the fee IF you do them during Flexchange. That makes working the Flexchange period more important than ever, and could increase the number of people trying to rely on that strategy.

More fees? For upgrading season? Resort quality?** I HOPE NOT! ** Unfortunately, it makes just as much sense to me to charge extra for season upgrades as it does for unit size upgrades. Once again, that’s supposed to be factored into trading power and comparable exchanges, but the lure of extra fees can be powerful. Hopefully they won’t expand to additional upgrade fees, because that would make trading through Interval less and less appealing.

Comments? Questions?

What do you think of this new fee? Have you done unit size upgrade exchanges with Interval before? Do you think you will do so in the future? Will this change the way you plan your deposits and exchanges?

~~~~~~~~~~~~~~~~~~~~~~If you’re new to the world of timeshare exchanges, it can be pretty confusing. One place to start is with my free guide The #1 Secret to Getting Better Timeshare Exchanges. Start working the system to your advantage!
~~~~~~~~~~~~~~~~~~~~~~

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12 Comments

I think the upgrade fees are unfair. Interval clearly wants to make profit out of timeshare owners. It is cheaper to take a cruse where it is all inclusive. With time share you have to pay for mortgage, maintenance fees, II membership fees, exchange fees, upgrade fees and your airline tickets. All this adds up to lower value to the timeshare owner. Please be aware the timeshare and vacation industry will be effected with terrorism across the globe and there by causing lower demand. Interval marketed free upgrades to its customers white renewing membership.. I predict the timeshare sales will suffer, people will seek for other cheaper vacation options such as cruises, rentals. The CEO must be out of his mind and is ill advised by his strategist. PLEASE THINK THOUSAND TIMES BEFORE ANY OF YOUR FRIENDS AND FAMILY VENTURE INTO TIME SHARE PURCHASE> I INTEND TO WARN PEOPLE OF PIFALLS OF TOMESHARE AND EXCHANGE RELATED COSTS

Hi Deera –
Thanks for your comment. I don’t like the new upgrade fees either, but of course Interval is trying to make money off timeshare owners, because that’s the business they’re in. Timeshares aren’t for everybody, but I believe that they do have advantages for some people. I would only recommend that people buy a timeshare with their eyes wide open, after they thoroughly understand what they’re getting into. The typical high-pressure timeshare sales process discourages this, and that’s where people can wind up with something they didn’t understand. A good place to start is with my free Consumer Awareness Guide to Timeshares

I Look at this a little differently. I trade a Park City Marriott lock off. Sometimes I score and get a 2 bedroom. Many times I don’t or there is no availability. I would gladly pay $99 to get that extra bedroom/master unit.

So I worked for MVCI for many years and became very familiar with the ins and outs of II’s system as it pertains to exchanges. I am now working for another company and we are in sales. We are currently setting up a president’s club for our top sales people that include a once a year all-inclusive getaway to a destination. I was looking in to using II for its getaway packages but as it has been more then 8 years and their getaway package pricing cannot be viewed without a membership Im unable to get a feel for the prices they have and if that would be a viable option. I also have a keen understanding of the exchange game and how to by-pass it to go pretty much wherever you want. However these new upgrade fees really throw a wrench in to the value you can see out of working that system. I would assume that plays in to why they added this fee and its dissapointing to say the least. I am not very familiar with RCi’s points program nor the finer details of the rules and regulations that govern it. Im entirely uninterested in playing their exchange game as this defeats the value I am able to get out of it. If we are looking for access to getaway packages for all inclusive resorts what would your suggestion be as the best route to go on that? Should we even bother with the timeshare exchange companies? or is there a more viable option for something of this nature.

Hi Jeff –
Thanks for your question! There are certainly plenty of all-inclusive resort packages available on both Interval Getaways and RCI Extra Vacations. As I’m sure you know, the price you actually have to pay on those is mostly the all-inclusive fee. They’re often advertised with really low prices, but then the all-inclusive fees can be huge. I wrote about this in All-inclusive fees can multiply your costs.

Another point is that getting an all-inclusive vacation this way is not always the best deal. Search online and look at other travel booking websites. It’s not uncommon to find that you can get a better overall price for that all-inclusive stay by booking it through another avenue.

I have been an II member for 16 years, and have always been able to bank and trade my 1/1 off season week for nice 2 and 3 bedroom units for the flat trade fee. A few weeks ago, I saw the upgrade fee, and was confused by it. Many of the Resorts I was looking at only HAD 2 bedroom units available, but, there was the 99$ upgrade fee. Since, like all owners, I had never been informed of the new fee structure, I didn’t understand how or why I had to pay 99$ extra. I understood it to mean, that if I booked the 2 bedroom unit that was available, I could get upgraded to a 3 bedroom. Since there were no 3 br units, what was I getting for the money?
I sent an email questioning this and received a response that did not answer my question at all. Today, I deposited my week as I do each year, and then called to speak to a rep regarding this fee. Quite frankly, she made it sound like I have been getting away with something for the past decade and a half. As if there had ALWAYS been a rule that I could only pick up a trade equal to what I banked.
I then researched the issue and found your excellent website, and saw the letter that II had sent you in response to your inquiry about the new fees. I then emailed II to tell them how angry and upset I am regarding this new fee structure and how I had just deposited my week, planned to use it ASAP, and then research switching to a new trade company. I was delighted to get an automated email response saying how they had an extremely high email volume, and it may be a longer wait time to get an answer back from them.
I hope they are swamped with angry customer email, and will consider eliminating this new fee. Thank you for your good work.

Hi Teresa –
Thanks for writing and sharing your story! That’s quite something that the rep made you feel like you’d been “getting away with something” for the past decade! You were working within their system and playing it smart to get what you want! I’d say you deserve kudos for that!
Unfortunately the rules keep changing, and this is an example of how it happens… I’d also like to see them eliminate this new fee, but I have doubts that would ever happen. We’ll see!
Thanks again, – Deanna.

I have a two bedroom at Lawrence Welk in pSouthern California (red zone). I have been thinking of moving from RCI to Interval because I cannot find good Properities to exchange . I have a week not points , and have not become a platinum member.
Am I missing something in the best way to exchange? Seems like the fees keeping going up not to mention the maintenance fees. Any help is greatly appreciated.

Hi Sue –
Thanks for your question. Unfortunately, both RCI and Interval have fees that keep going up! At the moment, Interval’s exchange fees are lower, but they have this upgrade fee that RCI doesn’t have. For more about the pros and cons of the two exchange companies, see my free write-up on RCI vs. Interval – Which is better?.
Good luck with it! – Deanna.

I would like to point out that when we purchased our studio we were told that if we found a timeshare available in a location that only had larger units that we could still trade. All those sale pitches excluded the fact that extra cost would be involved. I know our timeshare company doesn’t control II but we feel that we have been misled.

Hi Mary –
Thanks for your comment! I understand your frustration with this! It’s like a benefit was just taken away, making your timeshare not as worthwhile as you thought it was. 🙁 Perhaps your timeshare didn’t know II would implement this change, or perhaps they knew about it but just didn’t mention it. Either way, I don’t think there’s much you can do about it at this point, except perhaps investigate exchange opportunities through other companies besides Interval.
Wish I had better news for you! – Deanna.